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Appeals court fires back at Obama's comments on health care case

President Barack Obama gestures during his joint news conference with Canadian Prime Minister Stephen Harper, and Mexican President Felipe Calderon, Monday, April 2, 2012, in the Rose Garden at the White House in Washington.
AP Photo/Carolyn Kaster

(CBS News) In the escalating battle between the administration and the judiciary, a federal appeals court apparently is calling the president's bluff -- ordering the Justice Department to answer by Thursday whether the Obama Administration believes that the courts have the right to strike down a federal law, according to a lawyer who was in the courtroom.

The order, by a three-judge panel of the U.S. Court of Appeals for the 5th Circuit, appears to be in direct response to the president's comments yesterday about the Supreme Court's review of the health care law. Mr. Obama all but threw down the gauntlet with the justices, saying he was "confident" the Court would not "take what would be an unprecedented, extraordinary step of overturning a law that was passed by a strong majority of a democratically elected Congress."

Overturning a law of course would not be unprecedented -- since the Supreme Court since 1803 has asserted the power to strike down laws it interprets as unconstitutional. The three-judge appellate court appears to be asking the administration to admit that basic premise -- despite the president's remarks that implied the contrary. The panel ordered the Justice Department to submit a three-page, single-spaced letter by noon Thursday addressing whether the Executive Branch believes courts have such power, the lawyer said.

The panel is hearing a separate challenge to the health care law by physician-owned hospitals. The issue arose when a lawyer for the Justice Department began arguing before the judges. Appeals Court Judge Jerry Smith immediately interrupted, asking if DOJ agreed that the judiciary could strike down an unconstitutional law.

The DOJ lawyer, Dana Lydia Kaersvang, answered yes -- and mentioned Marbury v. Madison, the landmark case that firmly established the principle of judicial review more than 200 years ago, according to the lawyer in the courtroom.

Smith then became "very stern," the source said, suggesting it wasn't clear whether the president believes such a right exists. The other two judges on the panel, Emilio Garza and Leslie Southwick--both Republican appointees--remained silent, the source said.

Smith, a Reagan appointee, went on to say that comments from the president and others in the Executive Branch indicate they believe judges don't have the power to review laws and strike those that are unconstitutional, specifically referencing Mr. Obama's comments yesterday about judges being an "unelected group of people."

I've reached out to the White House for comment, and will update when we have more information.

UPDATE 6 p.m. ET: The White House is declining to comment on the 5th Circuit's order, but the president today did clarify his comments that it would be "unprecedented" for the Court to overturn laws passed by a democratically elected Congress. During a question-and-answer session after a luncheon speech in Washington, a journalist pointed out "that is exactly what the Court has done during its entire existence."

Mr. Obama suggested he meant that it would be "unprecedented" in the modern era for the Court to rule the law exceeded Congress' power to regulate an economic issue like health care.

"The point I was making is that the Supreme Court is the final say on our Constitution and our laws, and all of us have to respect it, but it's precisely because of that extraordinary power that the Court has traditionally exercised significant restraint and deference to our duly elected legislature, our Congress. And so the burden is on those who would overturn a law like this," Mr. Obama said.

"Now, as I said, I expect the Supreme Court actually to recognize that and to abide by well-established precedence out there. I have enormous confidence that in looking at this law, not only is it constitutional, but that the Court is going to exercise its jurisprudence carefully because of the profound power that our Supreme Court has," he said.

And now DOJ gets to write three single-spaced pages expounding on that. Due at high noon on Thursday.

UPDATE 6:55 p.m. ET: Audio from the 5th Circuit hearing, with Judge Smith's order to DOJ, is available here.

In the hearing, Judge Smith says the president's comments suggesting courts lack power to set aside federal laws "have troubled a number of people" and that the suggestion "is not a small matter."

The bottom line from Smith: A three-page letter with specifics. He asked DOJ to discuss "judicial review, as it relates to the specific statements of the president, in regard to Obamacare and to the authority of the federal courts to review that legislation."

"I would like to have from you by noon on Thursday -- that's about 48 hours from now -- a letter stating what is the position of the Attorney General and the Department of Justice, in regard to the recent statements by the president," Smith said. "What is the authority is of the federal courts in this regard in terms of judicial review?"

Smith made his intentions clear minutes after the DOJ attorney began her argument, jumping in to ask: "Does the Department of Justice recognize that federal courts have the authority in appropriate circumstances to strike federal statutes because of one or more constitutional infirmities?"

Kaersvang replies yes, and Smith continues: "I'm referring to statements by the president in past few days to the effect, and sure you've heard about them, that it is somehow inappropriate for what he termed 'unelected' judges to strike acts of Congress that have enjoyed -- he was referring to, of course, Obamacare -- to what he termed broad consensus in majorities in both houses of Congress."

In asking for the letter, Smith said: "I want to be sure you're telling us that the attorney general and the Department of Justice do recognize the authority of the federal courts, through unelected judges, to strike acts of Congress or portions thereof in appropriate cases."